Agricultural export requires user-centric solutions in the era of SPS standards

To ensure compliance of Agricultural proudcts with international standards and foster growth in agricultural exports, there is a need for a supportive domestic ecosystem. Photo: TBS

Foreign trade is an essential element of economic development, facilitating the movement of goods and services while stimulating overall economic growth, including job creation, investment, and the expansion of the financial sector and infrastructure.

Export earnings are particularly desirable as they inject much-needed revenue directly into the economy. According to government statistics, export earnings in Bangladesh nearly doubled over a decade, increasing from US$ 29,963.66 million in the 2012–13 fiscal year to US$ 60,971.26 million in 2021–22.

Agriculture plays a significant role in Bangladesh's export earnings. For instance, in the 2020–21 fiscal year, this sector contributed US$1,028 million to total export earnings. However, exporting presents unique challenges, requiring dealing with forces beyond the domestic sphere and subject to broader local and international politics, preferences, treaties, standards, and regulations.

Exporting agricultural products adds layers of complexity due to sanitary and phytosanitary standards (SPS), primarily aimed at addressing potential effects on human health and biodiversity in recipient countries.

SPS measures are the minimum standards that agriculture exporters must adhere to, set by the World Trade Organisation (WTO), to ensure food safety and animal and plant health, covering aspects such as pesticide levels, additives, chemical residues, pests, diseases, etc.

Specific recipient countries can impose additional measures, placing the burden of compliance on exporters. Noncompliance may have adverse effects on both the brand or product category and the national image.

To ensure compliance with international standards and foster growth in agricultural exports, there is a need for a supportive domestic ecosystem. Currently described by commentators as 'complicated' and 'confusing,' the exporting process for agriculture and livestock products requires an SPS certificate, causing ambiguity and uncertainty. Lack of awareness regarding updated regulations and their application status further compounds the challenges.

Various ministries and departments in Bangladesh are involved in implementing SPS regulations, with the WTO cell under the Ministry of Commerce serving as the National Notification Authority for SPS issues. Ministries such as Fisheries and Livestock, Agriculture, Environment and Forest, Commerce, and the Bangladesh Standards and Testing Institution (BSTI) are part of the organisations responsible for SPS certification.

Given the diverse nature of products requiring testing and certification, the involvement of multiple government agencies is likely. Exporters must navigate a fourteen-step process to obtain an SPS certificate from the Ministry of Fisheries and Livestock and a five-step process from the Ministry of Agriculture, as outlined on the Bangladesh Trade Portal.

However, exporters express major concerns, including a lack of easily accessible testing facilities, particularly for BSTI labs across diverse geographical locations of production hubs, causing uncertainty and unnecessary costs.

More effort is needed in this area to facilitate increased exports and create a seamless experience. Establishing a dedicated multidisciplinary coordination team is essential to observe, monitor, and take action on trade barriers, ultimately increasing access to export markets by drawing on the expertise and coordination of various ministries.

Sketches: TBS

Tania Akter, MBA, MSc is a Senior Lecturer at BRAC Business School, BRAC University. Md Arif Hossain Mazumder, PhD MIPA is an Assistant Professor(Accounting) at BRAC Business School, BRAC University.